Ka Ming Metal Manufacturing Ltd. (KM) and Sun Tool Metal Engineering works Ltd. (ST) are heavy metal companies and reported the following financial statements for the year of 2021. Balance Sheet as at December 31, 2021 KM $ ST $ Current assets 27,500,000 22,000,000 Net fixed assets 25,000,000 17,000,000 Total assets 52,500,000 39,000,000 Current liabilities 20,000,000 15,000,000 Long-term debt 8,000,000 8,000,000 Total liabilities 28,000,000 23,000,000 Shareholders’ equity Common stock 15,500,000 9,000,000 Retained earnings 9,000,000 7,000,000 Total shareholders’ equity 24,500,000 16,000,000 Total liabilities and shareholder' equity 52,500,000 39,000,000 Income Statement For the Year Ended December 31, 2021 KM $ ST $ Sales 66,000,000 48,000,000 Cost of goods sold (35,000,000) (22,000,000) Selling and administrative (10,000,000) (10,000,000) Depreciation (8,000,000) (6,000,000) ЕBIT 13,000,000 10,000,000 Interest (3,000,000) (1,900,000) Taxable income 10,000,000 8,100,000 Тахes (2,800,000) (2,268,000) Net income 7,200,000 5,832,000 Dividends 2,000,000 1,000,000 Addition to retained earnings 5,200,000 4,832,000

Ka Ming Metal Manufacturing Ltd. (KM) and Sun Tool Metal Engineering works Ltd. (ST) are heavy metal companies and reported the following financial statements for the year of 2021. Balance Sheet as at December 31, 2021 KM $ ST $ Current assets 27,500,000 22,000,000 Net fixed assets 25,000,000 17,000,000 Total assets 52,500,000 39,000,000 Current liabilities 20,000,000 15,000,000 Long-term debt 8,000,000 8,000,000 Total liabilities 28,000,000 23,000,000 Shareholders’ equity Common stock 15,500,000 9,000,000 Retained earnings 9,000,000 7,000,000 Total shareholders’ equity 24,500,000 16,000,000 Total liabilities and shareholder' equity 52,500,000 39,000,000 Income Statement For the Year Ended December 31, 2021 KM $ ST $ Sales 66,000,000 48,000,000 Cost of goods sold (35,000,000) (22,000,000) Selling and administrative (10,000,000) (10,000,000) Depreciation (8,000,000) (6,000,000) ЕBIT 13,000,000 10,000,000 Interest (3,000,000) (1,900,000) Taxable income 10,000,000 8,100,000 Тахes (2,800,000) (2,268,000) Net income 7,200,000 5,832,000 Dividends 2,000,000 1,000,000 Addition to retained earnings 5,200,000 4,832,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 10MC

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Question

(a) Show the workings for the following financial ratios for Ka Ming Metal Manufacturing Ltd.

(KM) and Sun Tool Metal Engineering works Ltd. (ST) during the year of 2021. (Shown in the photo below)

(round final answer to 2 decimal places, thanks)

Ka Ming Metal Manufacturing Ltd. (KM) and Sun Tool Metal Engineering works Ltd. (ST) are
heavy metal companies and reported the following financial statements for the year of 2021.
Balance Sheet as at December 31, 2021
KM
$
ST
$
Current assets
27,500,000
22,000,000
Net fixed assets
25,000,000
17,000,000
Total assets
52,500,000
39,000,000
Current liabilities
20,000,000
15,000,000
Long-term debt
8,000,000
8,000,000
Total liabilities
28,000,000
23,000,000
Shareholders’ equity
Common stock
15,500,000
9,000,000
Retained earnings
9,000,000
7,000,000
Total shareholders' equity
24,500,000
16,000,000
Total liabilities and shareholder’ equity
52,500,000
39,000,000
Income Statement For the Year Ended December 31, 2021
KM
$
ST
$
Sales
66,000,000
48,000,000
Cost of goods sold
(35,000,000)
(22,000,000)
Selling and administrative
(10,000,000)
(10,000,000)
Depreciation
(8,000,000)
(6,000,000)
ЕBIT
13,000,000
10,000,000
Interest
(3,000,000)
(1,900,000)
Taxable income
10,000,000
8,100,000
Тахes
(2,800,000)
(2,268,000)
Net income
7,200,000
5,832,000
Dividends
2,000,000
1,000,000
Addition to retained earnings
5,200,000
4,832,000

KM
ST
$28,000,000
$23,000,000
E.g. Debt to Equity Ratio
$24,500,000
$16,000,000
Equity Multiplier
1.
Total Asset Turnover
3.
4.
Profit Margin
5.
6.
Retention ratio
7.
8.
2.

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